Trustmark must pay Stanford contract

By Patsy R. Brumfield/NEMS Daily Journal

NEW ORLEANS – Trustmark National Bank must pay $2 million in collateral which convicted Ponzi schemer R. Allen Stanford deposited with it, the 5th Circuit Court of Appeals ruled Monday.
The funds were deposited against a $1.98 million computer contract with HP Financial Services Venezuela CCA.
HPFS wants the bank to pay after it says Stanford defaulted in their agreement.
Affirming a ruling to U.S. District Judge David C. Godbey in Dallas, Texas, the 5th Circuit agreed the funds Trustmark holds belong to the court-appointed receiver seeking to build a victims’ fund.
“Trustmark may resent this ruling since it requires it to pay immediately,” the 5th Circuit said, but it does not prevent the bank from seeking settlement with the receiver.
Friday, Trustmark sought to stay the order to pay the money to the receiver.
The appeals court order also said Trustmark is not barred from paying HP Financial Services Venezuela CCA its $1,986,745 bill on a computer equipment lease to Stanford. HPFS claims Stanford defaulted in the agreement.
In March 2009, the receiver told Trustmark it could not honor any draw requests under a letter of credit and use any of Stanford’s collateral for reimbursement.
Because Stanford’s cash collateral secured the HPFS letter of credit, Texas U.S. District Judge David C. Godbey said the cash belongs to the receivership estate.
While it is probable that Trustmark will suffer injury since it is not assured of recouping the full amount from the receivership, the 5th Circuit said, that doesn’t outweigh the receiver’s interest in maintaining the estate.
patsy.brumfield@journalinc.com